Year Published: 2010
The people of NSW own the minerals on Crown land and private land. The Government allows mining companies, via leases, to extract and sell these minerals for a price. This price is known as a ‘royalty’.
Mining royalties are a source of significant revenue to NSW. In 2008-09, the Government received $1.28 billion in mining royalties representing about 2.6 per cent of the total revenue collected by the Government that year. Coal accounted for over 95 per cent of the royalties.
The revenue the Government receives from mining royalties has increased substantially in recent times. Royalty revenue increased by 123 per cent between 2007-08 and 2008-09 (from $573 million to $1.28 billion), largely due to a sharp rise in coal export prices and increases in royalty rates.
The Royalty and Statistics Branch of the NSW Department of Industry and
Investment (DII) administers the collection of mining royalties.
This audit examined how well DII ensures mining lease holders pay the royalties they owe the State on time. Specifically, the audit assessed
has complete, accurate, and up-to-date information on leases
has clear rules for calculating and collecting royalties
identifies late and inaccurate royalty returns
undertakes comprehensive quality audits to validate royalty payments
acts on late and inaccurate returns.
Year Published: 2014
Sector: Oil & Gas
Pricing mechanism on major petroleum products in central public sector oil marketing companies
Year Published: 2015
Sector: Oil & Gas
Natural Gas (NG), one of the cleanest, safest and most useful of fossil fuels is being increasingly used in various sectors like fertilizer, power, city gas, steel and other heavy industries. Primary consumers of NG in the country are in the power and fertiliser sectors (62 per cent) which are critical to economic development of the country. The Working group on Petroleum and Natural Gas for the XI and XII Plan anticipated increase in requirement of NG in the fertilizer sector to meet expected increase on account of conversion of liquid fuel based plants to NG/re-gasified LNG (R-LNG) based plants, expansion of plants, revival of closed units, setting up of new plants etc. Similarly, increase in requirement of NG was expected to meet the projected power generation.
Demand for NG in the country was far in excess of its supply from domestic as well as imported sources taken together and gap between demand and supply was 77 Million Metric Standard Cubic Metre per day (mmscmd) in 2009-10. Consequent upon reduction in production from domestic fields from 2011-12, this gap between demand and supply widened further to 250 mmscmd in 2013-14. As domestic demand was far in excess of indigenous production and there were very few new domestic sources available to cater to additional demand, options available to meet the demand were import of NG through transnational pipelines and import of Liquefied Natural Gas (LNG). Government of India (GoI) initiated steps for import of gas through Trans-National pipelines (1989) and for import of LNG (1995) anticipating shortfall in domestic production.
With a view to having a long term policy on Hydrocarbons, a Group of Ministers (GoM) was set up in 1999 for working out a specific framework for developing “India Hydrocarbon Vision- 2025”. The report submitted by GoM (2000), inter alia, set objectives for NG sector which included steps to ensure adequate availability of a mix of domestic gas, gas imported through pipelines and Re-gasified Liquefied Natural Gas (R-LNG). It suggested various initiatives for import of gas from neighbouring and other countries, expedite setting up of a regulatory framework and encourage domestic
companies to participate in LNG chain.
Further, to provide adequate infrastructure for supply of NG, GoI conceptualised (2000) a National Gas Grid to facilitate supply of NG to remote areas of the country.
Subsequently, considering the need to provide a policy framework for the future growth of pipeline infrastructure to facilitate evolvement of a nationwide gas grid, GoI notified a Pipeline Policy in 2006. In order to provide regulatory and legal framework for downstream activities, GoI enacted (March 2006) the Petroleum and Natural Gas Regulatory Board (PNGRB) Act and established PNGRB (October, 2007).
Year Published: 2019
Sector: Oil & Gas
Background to the report
There are currently around 320 fixed installations, such as oil platforms, in production in the UK, primarily in the North Sea. To date, oil and gas assets have enabled operators to recover more than 44 billion barrels of oil and gas. But reserves are running out, with the remaining oil and gas becoming harder to find and extract. The government has an objective to maximise the potential economic value of the UK’s remaining oil and gas reserves.
Oil and gas operators in the UK are increasingly decommissioning their assets as they are reaching the end of their useful economic lives. Operators’ expenditure on decommissioning is rising: they have spent more than £1 billion on decommissioning in each year since 2014. Decommissioning affects the government’s finances because operators can recover some of their costs through tax reliefs. These enable operators to deduct decommissioning costs from their taxable profits and potentially claim back some taxes that they have previously paid. With decommissioning activity increasing, the government is paying out more in tax reliefs for decommissioning at the same time as tax revenues have fallen due to a combination of lower production rates, a reduction in oil and gas prices and operators incurring high tax-deductible expenditure. In 2016‑17, the government paid out more to oil and gas operators in tax reliefs than it received from them in revenues for the first time, although revenues recovered in 2017-18 and were greater than tax relief payments.
Content and scope of the report
This report sets out the landscape of oil and gas decommissioning to enable Parliament to consider whether the various government departments involved are protecting taxpayers’ interests effectively. It covers:
– the role oil and gas has played in the UK economy and the government’s current objectives for the sector (Part One);
– the potential costs of decommissioning that operators will pass on to taxpayers (Part Two); and
– how the government is managing the risks to taxpayers (Part Three).